By Dimitra DeFotis

The U.S. is likely to be the world’s largest oil exporter by 2020, surpassing Saudi Arabia sooner than expected, according to annual energy projections published Monday by the International Energy Agency.

The U.S. now produces all but about 20% of its energy needs domestically in a push toward energy independence. We can thank the boom in the drilling technique known as hydraulic fracturing, which has amounted to a spigot on natural gas and oil from shale formations. Last year, the IEA indicated Russia and Saudi Arabia were more likely to be the largest oil exporters in the decade ahead.

The IEA says Asia will receive almost 90% of Middle Eastern oil shipments by 2035, with Iraq making up 45% of global oil production growth by 2035. If that holds true, Iraq would surpass Russia as the second-largest global oil exporter.

The projections did little to lift energy investments. The Energy Select Sector SPDR (XLE) was flat at about $69.56 in midday trading. Shares of ExxonMobil (XOM), were also flat, at about $87.21, and other integrated oil players, including ConocoPhillips (COP), Chevron (CVX) and Marathon Oil (MRO) fell. Shares of oil services player Schlumberger (SLB) also fell.

Natural gas from “unconventional” sources, and liquefied natural gas, will diversify the flow of trade and pressure suppliers of conventional gas, and gas prices linked to oil.

The need for electricity in emerging economies will drive a 70% increase in worldwide demand, with renewable sources accounting for half of new global capacity and the highest electricity prices persisting in Europe and Japan.

Increasing water needs to meet power demands will determine the viability of energy projects, especially for new coal and nuclear plants.

Greater energy efficiency will promote economic growth in India, China, the United States & Europe.

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